A High Deductible Health Plan (HDHP) is a type of health insurance plan that has a higher deductible than traditional insurance plans. The monthly premium is usually lower, but you pay more health care costs yourself before the insurance company starts to pay its share. HDHPs are intended to incentivize consumer-driven healthcare and are a form of catastrophic coverage, intended to cover for catastrophic illnesses. Here are some key features of HDHPs:

• Higher Deductible: HDHPs have much lower premiums but high deductibles, co-insurance, and out-of-pocket maximums. In this model, the individual assumes all medical costs until the minimum deductible is met.

• Health Savings Account (HSA): An HDHP can be combined with an HSA, which is a type of savings account that lets you set aside money on a pre-tax basis to pay for certain medical expenses. Being covered by an HDHP is also a requirement for having an HSA.

• Preventive Care: HDHPs cover certain preventive care before the deductible is met, as required by the Affordable Care Act (ACA). However, under an HDHP, no other services can be paid for by the health plan until the insured has met the deductible.

• Catastrophic Coverage: HDHPs are a form of catastrophic coverage, intended to cover for catastrophic illnesses. They also protect you against catastrophic out-of-pocket expenses for covered services.

HDHPs have been growing in popularity since their inception in 2004, with increasing employer and government options. As of 2016, HDHPs represented 29% of the total covered workers in the United States. However, HDHPs may not make sense for everyone, and you should consider your lifestyle and health needs before choosing an HDHP.